POWER: Nordic Hydro Stocks Decline for First Time in 13 Weeks
Jul-31 09:40
Nordic hydropower stocks declined for the first time since week 17 in week 30, dropping to around 74.48% of capacity amid firm power demand and lower precipitation. Stocks narrowed their surplus to the 10-year average and 2024 to fresh multi-week lows.
- Stocks declined by about 0.34 percentage points compared to a 0.79-point rise in week 29.
- Hydro levels dropped sharply to 1.96-point surplus to the 10-year average from 3.50 points the week prior.
- The surplus for the same week in 2024 also narrowed to 1 point from 2.9 points.
- Precipitation in the Nordic region edged down on the week to a total of 7.3mm in week 30, down from 7.78mm in week 29 and much lower than 13.37mm in week 28. Rainfall was also lower than the 30-year average.
- Firm power demand on the week in the region placed downward pressure on stocks, with Norwegian demand averaging about 11.5GW compared to 11.86GW in week 29.
- While Swedish demand averaged around 11.29GW in week 30 compared to 11.05GW in week 29.
- Nuclear generation in the region was mixed on the week, with Swedish output at around 4GW, edging up from 3.9GW but lower than 4.22GW in week 28, while Finnish generation was at 4.04GW compared to 4.07GW.
- Looking ahead, Nordic nuclear capacity rose to 81% of capacity on Thursday morning, up from 80% on Wednesday, according to Bloomberg. 10 of 11 units are online.
- The 1.4GW OS3 nuke will be offline until 17 September.
- The latest ECMWF suggests Norway’s and Sweden’s hydrological balance to end at +697GWh and +3.18TWh, respectively, on 15 August compared to +1.13TWh and +3.32TWh in the previous forecasts for the same day.
- Additionally, Norwegian net inflows are projected to reach 2.82TWh in week 31 and 4.31TWh in week 32. For Sweden, anticipated inflows stand at 1.81TWh for week 31 and 2.4TWh in week 32, according to Reuters.
- Rainfall in the Nordics has been mixed with upward revisions over 1-2 August and downward revisions over 3-4 August. Despite this, precipitation is anticipated to be generally above the seasonal average throughout the 14-day ECMWF forecast.
Average temperatures in the region have been revised higher over 2-5 August and are anticipated to be above the 30-year norm over 31 July-14 August.
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BELGIUM T-BILL AUCTION RESULTS: 3/6/11-Month TCs
Jul-01 09:39
| Maturity | Oct 16, 2025 | Jan 15, 2026 | Jun 11, 2026 |
| Amount | E1.153bln | E907mln | E1.162bln |
| Target | E2.8-3.2bln | Shared | Shared |
| Previous | E880mln | E1.03bln | E1.601bln |
| Avg yield | 1.911% | 1.916% | 1.907% |
| Previous | 1.911% | 1.916% | 1.926% |
| Bid-to-cover | 1.44x | 1.67x | 1.97x |
| Previous | 2.77x | 2.06x | 2.21x |
| Previous date | Jun 10, 2025 | Jun 03, 2025 | Jun 10, 2025 |
EGBS: Bund Futures Follow USTs Higher But Initial Resistance Untested
Jul-01 09:38
Bund futures have followed US Treasuries higher through the European morning, now +49 ticks at 130.64. Futures reached a session high of 130.73 earlier, leaving initial resistance at 130.80 (June 26 high) untested. Key resistance has been defined at 131.95, the Jun 13 high. Clearance of this level is required to reinstate a bullish theme.
- The German curve has bull flattened, with 30-year yields down 6bps to 3.04%.
- There have been several ECB speakers this morning, with the annual Sintra forum well underway. Most notably, Vice President de Guindos suggested a EURUSD exchange rate above 1.20 would be “complicated”, hinting at weaker imported price pressures and less competitive export markets.
- Indeed, while the Eurozone June manufacturing PMI essentially confirmed flash estimates (49.5 vs 49.4 flash and prior), both the Spanish and German readings referenced disinflationary forces from the exchange rate.
- Eurozone flash June headline and core inflation were in line with consensus at 2.0% Y/Y and 2.3% respectively. Services ticked up modestly to 3.3% YY (vs 3.2% prior). ECB 1-year ahead May consumer inflation expectations fell to 2.8% (vs 3.1% prior).
- 10-year EGB spreads to Bunds are within 1bp of yesterday’s closing levels. Ireland will hold one auction in Q3 (in September), but did not comment on whether we will see further auctions in Q4 or not.
- The remainder of today’s session includes appearances from ECB’s Schnabel and Lagarde. The ECB’s seasonally adjusted inflation metrics will also be released in due course.
BTP: Basis Trade
Jul-01 09:30
BTP Basis trade, suggest Cash seller:
- IKU5 ~1.67k at 121.51.
